As of 2020, and following the controversial ‘Brexit’ referendum in 2016 that ratified the UK’s excision from the organization, 27 countries remain in the EU. And though the EU’s core message is one of unity, cohesion, and a ‘single market’ environment, the reality is somewhat different. The EU’s exists on a patchwork of political treaties, economic agreements that cater to national interests rather than to the ‘greater European good’, and a fragmentation of the geopolitical landscape across the continent.
This fragmentation indirectly led to an individualist approach to economic initiatives, with predictable results. Up to 2017, blockchain had been treated as a technological pariah of sorts, mostly because of its association with the slippery world of cryptocurrencies, and particularly, Bitcoin. Government agencies, business leaders, and long-established financial institutions chose to shun and discredit blockchain as somewhat of a ‘rogue’ technology that could not be trusted, a position that was only further cemented by the meteoric rise of Initial Coin Offerings (ICOs).
While traditional markets had knee-jerk reactions to this emerging technology and acted accordingly -to their own detriment, as it turned out-, entrepreneurs went the opposite way: they embraced blockchain from the start.
The long, cold winter of ICOs
The ICO era spanned, roughly speaking, between 2017 and 2019. Initial Coin Offering was the buzzword of 2017, bar none. Crypto startups kept popping up across the international landscape like mushrooms in the rain, which quickly led to market saturation. During these 24 months, everyone became a crypto entrepreneur with an eye on the rapidly fattening ICO pie. At its peak, circa Q1 of 2018, ICOs raised an eye-watering $6.8bn. (This figure was greater than the entire ICO funding of 2017). Problem was, the ICO bubble could only be inflated so far. Barely a year after ICO funding reached its peak, the crash came with quasi-biblical intensity. By early 2019, it was all over. The ICO frenzy came to a screeching halt, louder than the dot.com crash of the nineties.
ICOs had run rampant for the best part of 24 months. With little or no regulation or control, greed and plain thievery became commonplace. (A 2018 Ernst & Young study into more than 370 ICOs concluded that about $400 million of the total $3.7 billion funds raised to date had been stolen.) The ICO chain reaction could only end one way, and did so in 2019.
The long and cold winter of ICOs and its dramatic conclusion cast stark light onto two issues: Blockchain technology was here to stay, and a clear need for oversight.
2020: A momentous year
2020 has been -and continues to be- a challenging year. Economic predictions for 2020 were not particularly optimistic. Official charts showed that the European economy would hover just a whisker above stagnation for the entirety of 2020, with a projected 1.1 average growth of Gross Domestic Product (GDP). Of course, COVID-19 hit barely days into the new decade, rendering all those predictions moot.
But amidst staggering losses across many areas of the European economy, one specific market segment continues to thrive. Blockchain technology is now more in demand than ever before. Shortly after the onset of the pandemic in Europe, the World Economic Forum published a Blockchain Development Toolkit that helps companies develop and deploy blockchain supply chain solutions, for example. And this technology can also be applied to the fight against COVID-19 through a subset of tools and apps that assist in the early detection of emerging epidemics.
So blockchain, as a technology, remains. But what about oversight?
The EU Blockchain Observatory and Forum and Europechain: Drivers of blockchain adoption across Europe
In 2018, the European Commission (EC), the EU’s executive body launched a key technological initiative that might just become the EU’s unifying economic solution: The EU Blockchain Observatory and Forum.
The Forum’s official website states that the Blockchain Observatory and Forum will highlight key developments of the blockchain technology, promote European actors, and reinforce European engagement with multiple stakeholders involved in blockchain activities.
This is a broad statement with significant repercussions for businesses, technical innovation, and economic development across the continent. The Forum supports blockchain initiatives EU-wide, mapping, analyzing, and sharing knowledge about these enterprises to drive the creation of even more projects.
The organization does indeed see blockchain as a resilient and transformative piece of technological evolution. Mariya Gabrie, Commissioner for the Digital Economy and Society, says that “I see blockchain as a game changer and I want Europe to be at the forefront of its development. We need to establish the right enabling environment – a Digital Single Market for blockchain so that all citizens can benefit, instead of a patchwork of initiatives. The EU Blockchain Observatory and Forum is an important step in that direction.”
The Forum is an invaluable resource for EU-centric blockchain resources, but it’s far from unique. Europechain stands as one of Europe’s more prominent blockchain projects, delivering Blockchain-as-a-Service (BaaS), compliance & GDPR, and training & consulting services.
The bottom line is that blockchain is a relevant, adaptable, and viable technology whose ramifications and ‘real-world’ use cases are only starting to enter the mainstream. In a recent groundbreaking development, online payments giant Paypal has begun enabling its users to purchase and sell cryptocurrencies, for example. This could very well become the ‘missing link’ between the arcane world of crypto and mainstream.
The main takeaway from this piece is that EU businesses intending to adopt blockchain solutions, or create solutions of their own, are not alone. The Forum offers considerable knowledge resources and support to blockchain startups, while Europechain can become a valuable blockchain partner to drive this fast-growing technology forward.